Counties gain from cost-sharing law

Published: January 4, 2008

Those of us in the Senate and House who supported the change to the cost-sharing arrangement between the state and the counties are somewhat surprised by the continued confusion and lack of information about the projected benefits and built-in protections for the counties.
Counties’ Medicaid expenses are capped in the new state budget, as they will be by law in each biennium through at least 2014. The change was never intended to shift expense to the counties. The purpose of the new cost-sharing arrangement is simply to stop the waste that has cost taxpayers nearly $20 million in paperwork over the past decade.
It helps to understand that federal, state and county governments share costs for nine different categories of expense. The Legislature last year decided to divide the payment responsibility for these nine programs, instead of passing more than 135,000 bills back and forth each month. Nursing-home and home-care bills will be paid by the counties. The state will pay for the remaining seven programs, which include Medicaid and Medicare payments, cash grants and medical expenses for the elderly and disabled and residential care and other services provided by the state to abused and neglected children, delinquents and Children in Need of Services.
This change leaves services intact while reducing unnecessary three-way paperwork and the problems that ensue, including expensive litigation. The counties have expertise in long-term care, and it made sense to continue their involvement in this area. The cap will protect the counties from the expected growth in the elderly population. If the cap is exceeded, the state pays 100 percent of the expenses. This is but one of the protections built in for counties.
This plan also has the advantage of distributing the cost of caring for elders on a more equitable basis. Taxpayers who live in counties with a higher number of elders on Medicaid and a smaller tax base to distribute those costs pay more than the rest of us.
For example, on a per-capita basis, Coos County taxpayers pay more than six times the amount their counterparts in some wealthier counties pay.
So when do the changes take effect? Actually, nothing happens for the first year. We have allowed time to plan and to make certain that there is a smooth transition. Both the counties and the state are working together to develop an agreement that will guide the implementation.
For two years after that, billing responsibilities will be split, but a “hold harmless” provision ensures that no county will experience a loss of funds.
The equity provision will be partially implemented in the fourth year and fully implemented in the fifth. At that point, there will be some difference in county costs as some credits are given to the poorer counties to offset the formula bias against counties with a high percentage of elderly people on Medicaid.
Yes, this is new way to do business and change can create fear. But this change in billing practices in no way affects the services our needy elders receive. This change will ensure that we all share the costs more equally, while directing more money to services and less to wasteful bureaucracy. The new cost-sharing arrangement will save an estimated $1.3 million at the state level and a similar, if not larger, sum at the county level — simply by reducing unnecessary bureaucracy and paper pushing.
The question is not why the Legislature implemented this new arrangement — the question is why it wasn’t done sooner.
State Sen. Kathleen Sgambati is a Democrat from Tilton.

This article appears in the January 4 2008 issue of New Hampshire Business Review